While other MediaPost newsletters and articles remain free to all ... our new Research Intelligencer service is reserved for paid subscribers ...

Subscribe today to gain access to the every Research Intelligencer article we publish as well as the exclusive daily newsletter, full access to The MediaPost Cases, first-look research and daily insights from Joe Mandese, Editor in Chief.

Commentary

Breaking The Agency Addiction

The ad agency as we know it is either on the endangered species list or gearing up for a renaissance, depending on how you look at it.

On the one side, agencies are more in demand
than ever before. Fearful that they’ll leave important stones unturned, brands have become addicted to the idea of a different agency for every single need. They rely on agencies not just for
creative and media buying, but for the full implementation and execution of their digital and offline campaigns.

On the other side, brands are not just relying on agencies more than
ever, but also relying on more agencies than ever (sometimes as
many as 10 – 15 at a time). This is unsustainable in that it’s too many agencies for a brand to manage, and non-strategic in that it introduces a number of disparate parts that
aren’t working together in pursuit of a common goal.

advertisement

advertisement

Brands have simultaneously influenced the emergence of too many agencies and made themselves dependent on them. It’s now
up to brands to wean themselves off of their addiction–and drive an agency renaissance in the process.

The solution and opportunity lies in a holistic brand-driven approach where
brands prioritize creative and the customer experience and let technology deal with the technology and data aspects of campaigns wherever possible.

Here’s a look at where brands
took a wrong turn—and took agencies with them—and how they can get back on track.

Digital and Data: The Gateway to Agency Addiction

According to
recent research by Forrester Consulting, nearly four in 10 marketers said that one of their top three marketing challenges was their
over-reliance on vendors or agencies to drive their marketing strategy.

A natural follow up question is, “So, why do they continue to do rely so heavily on their agency
partners?”

One reason is that digital is complicated, and brands assume they only have two choices for dealing with growing needs: build a team of people, technology and resources
in-house, or outsource it. For many brands, it's easier to outsource, especially at the pace in which digital is coming at them, because it gives them instant access to talent and channel-based
expertise.

Another reason is that marketers own a lot more than they ever have, including a growing technology stack and the customer experience, making it difficult for them to stay on
top of the latest and greatest. Theoretically, outsourcing some functions to agencies would help marketers take more ownership over the full brand lifecycle. But instead, many brands are finding
that outsourcing presents a number of new issues that they have to deal with first.

More Agencies, More Problems

The issues of “more”
agencies and brands’ over-reliance on them are particularly pressing topics according to Forrester, which in its new report, “The New Agency Operating Model for Brands,” states that, “Agencies drop the ball on
data, technology and transparency—failing to deliver customer-obsessed strategies for clients. In the end, everyone is unhappy, including end customers.”

A lack of alignment
between brands’ various agencies is an overarching problem, but within each agency there are additional issues that affect brands. Namely, growing concerns around transparency in media buying, a
high rate of personnel turnover (especially at the lower, execution level), and lack of access to the real-time, integrated data (think 360-degree view of the customer) that would allow brands to
engage in modern-day interactions.

There’s also the issue of lack of scalability. Ultimately, brands that are relying on agencies to execute the tech and data aspects of their
campaigns (instead of using emerging technologies to automate them) will have issues of scale, directly related to personnel and related costs, and their efforts will plateau as a result.

Change Must Come From Brands

Needless to say, kicking the agency habit will require brands to slowly wean themselves off of some agencies.

To start, brands
must introduce a holistic approach and act as the central driving force that connects the disparate parts into a greater whole. This means assuming full ownership of its brand story, acting as its own
brand ambassador, and closely overseeing the perpetuation and dissemination of its narrative across channels.

When it comes to creative agencies, brands need to choose only those that
add value that the brand itself is unable to deliver or conceive of on its own. While the brand owns the story, it will always be important to get a fresh outsider perspective on how that story is
translated into creative. But don’t keep creative with one agency for too long as creativity wanes over time.

Next, the brand will need to regain control over its digital
execution. Brands have traditionally relied on agencies for this, but not necessarily because agencies are better than them at executing it. The truth of the matter is that humans are simply not
equipped to run efficient, holistic cross-channel campaigns at scale.

Use Agencies for Some Things But Not All Things

Agencies that are primarily
focused on the implementation aspects of brands’ cross-channel digital campaigns—either manually or with the help of technology—are being quickly outpaced by the emergence of new
autonomous technologies.

These self-driven technologies do away with the limitations of humans in trying to gather, analyze and act on mass amounts of data in real time. They’re
also able to apply insights gained from one channel to other relevant channels, rather than limiting insights only to the channel they originated from.

In agency terms, this would be the
equivalent of having one agency (perhaps the social media one) reporting to another agency or partner (such as the search and display one) about insights they’re seeing on Facebook, so that the
second agency can adjust its efforts accordingly based on what the first agency has learned. This is not a thing that actually happens in the agency world. But it will be soon.

According
to Forrester Consulting, “Managing complexity and regaining control over strategy requires powerful tools to reduce tactical
decision-making burdens and allow marketers to access the crucial information they need, when they need it. In this light, AI- driven tools represent a development in the market aimed at reducing
complexity, not increasing it.”

With technology solutions handling rote tasks previously handled by a number of different agencies, the brand can now dedicate the time it would have
spent managing its agencies to focusing on the customer strategy, experience delivery, and marketing performance and working with their agencies on those components.

Ultimately, breaking
the agency addiction means taking back control and streamlining brands’ reliance on agencies in the areas where technology allows them to do so.